What Hedge Funds Think About The Clorox Company (CLX)

Now, according to many of your peers, hedge funds are seen as overrated, old financial tools of a period lost to current times. Although there are In excess of 8,000 hedge funds in operation today, Insider Monkey aim at the leaders of this group, about 525 funds. It is widely held that this group oversees most of all hedge funds’ total assets, and by paying attention to their best equity investments, we’ve spotted a number of investment strategies that have historically outperformed the market. Our small-cap hedge fund strategy outperformed the S&P 500 index by 18 percentage points per year for a decade in our back tests, and since we’ve started sharing our picks with our subscribers at the end of August 2012, we have topped the S&P 500 index by 33 percentage points in 11 months (see all of our picks from August).

Equally as useful, positive insider trading activity is a second way to analyze the stock market universe. As the old adage goes: there are a variety of stimuli for an insider to drop shares of his or her company, but only one, very clear reason why they would initiate a purchase. Several academic studies have demonstrated the impressive potential of this strategy if piggybackers know what to do (learn more here).

Now that that’s out of the way, let’s analyze the newest info surrounding The Clorox Company (NYSE:CLX).

What does the smart money think about The Clorox Company (NYSE:CLX)?

Heading into Q3, a total of 19 of the hedge funds we track were bullish in this stock, a change of 0% from one quarter earlier. With hedgies’ sentiment swirling, there exists a few key hedge fund managers who were increasing their holdings considerably.

When using filings from the hedgies we track, Yacktman Asset Management, managed by Donald Yacktman, holds the most valuable position in The Clorox Company (NYSE:CLX). Yacktman Asset Management has a $515.6 million position in the stock, comprising 2.4% of its 13F portfolio. The second largest stake is held by Jim Simons of Renaissance Technologies, with a $99 million position; 0.3% of its 13F portfolio is allocated to the company. Other peers that hold long positions include Louis Navellier’s Navellier & Associates, David Harding’s Winton Capital Management and Peter Rathjens, Bruce Clarke and John Campbell’s Arrowstreet Capital.

Judging by the fact that The Clorox Company (NYSE:CLX) has witnessed dropping sentiment from the top-tier hedge fund industry, it’s easy to see that there were a few funds that elected to cut their full holdings last quarter. It’s worth mentioning that Andrew Sandler’s Sandler Capital Management cut the largest position of all the hedgies we key on, comprising about $16.1 million in stock. Anand Parekh’s fund, Alyeska Investment Group, also dropped its stock, about $5.5 million worth. These moves are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Insider trading activity in The Clorox Company (NYSE:CLX)

Insider buying made by high-level executives is best served when the company in question has seen transactions within the past half-year. Over the latest half-year time frame, The Clorox Company (NYSE:CLX) has experienced zero unique insiders purchasing, and zero insider sales (see the details of insider trades here).

We’ll also review the relationship between both of these indicators in other stocks similar to The Clorox Company (NYSE:CLX). These stocks are Lifetime Brands Inc (NASDAQ:LCUT), Libbey Inc. (NYSEAMEX:LBY), Helen of Troy Limited (NASDAQ:HELE), Jarden Corp (NYSE:JAH), and Newell Rubbermaid Inc. (NYSE:NWL). This group of stocks belong to the housewares & accessories industry and their market caps are similar to CLX’s market cap.

Using the results shown by the previously mentioned analyses, average investors should always watch hedge fund and insider trading activity, and The Clorox Company (NYSE:CLX) applies perfectly to this mantra.

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